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tv   Real Money With Ali Velshi  Al Jazeera  April 21, 2015 10:30pm-11:01pm EDT

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it is america versus china in a face off for global economic dom naying, the white house -- domination the white house wants to fast-track an asian trade deal freezing the chinese ou. it's bad for the american worker says a man i talk to. china's balance with a push to plug asia's infrastructure trap. you hear from a man calling it a wake-up call for washington. om-ali velshi this is -- i'm ali velshi this is "real money". is this a battle brewing between america's influence and americans interest?
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union leaders, environmentalists and a loud major city of congressman are on the left slamming president obama for his support of the trans-pacific partnership. others insist that the president and his forehands on the right are lined behind the controversial trade pack are doing what the u.s. needs to do to be competitive in the face of china's growing influence. the first question is not about china or the politics, it's direct. what is controversial about a trade deal. >> the trans-pacific partnership removes the trade barriers and tariffs around countries in the pacific rim. taking up to a third of trade and 40% of global economic activity. china, a fast-growing economy is specifically being left out of those talks by design. in the global competition for
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influence, the obama administration views t perform p as a tool to maintain economic privacy in the world. u.s. leaders hoped that upstarts can be kept in check, with free trade agreements. we'll have more on the intensifying competition between the u.s. and china. the t perform p is the 12th country zone negotiated now by the united states, japan, australia, canada mexico and others. in a new sign of the progress made the u.s. and japan narrows the gaps that stood in the way of a wider trade deal. whatever the motivation president obama is vasing stiff opposition from his own democratic flank in congress. organised labour and environmental activists from his base insists that free tried
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deals cost jobs and erode u.s. regulations and point to nafta which has been in place for 20 years. the debate over that is unresolved as to whether it's been a good or bad deal for americans. with the t.p.p. bandied around and the impact on our lives, it's time to revisit benefits and pit falls. >> reporter: the year was 1993. the leaders of the u.s., mexico and canada signed the north american trade agreement. >> it will tear down barriers. >> nafta's goal was to get rid of tariffs on goods traded between the three countries. projections were high protests loud. 20 years later nafta links 450 million people. economic output of all three combined is 17 million.
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trade flows have gone from 290 billion in 1993 to more than 1.1 billion. the freeies are hotly -- treaties are hotly debated. unions oppose nafta claiming 700,000 are lost. they argue stagnant wages is a casualty. the u.s. chamber of congress sees it. 5 million jobs are supported by the increased in trade due to nasta, it says. -- nafta, it says. it's a dividing issue, more than 20 years after being signed. scott paul is the president of the alliance for american manufacturing, a group lobbying on behalf of manufacturers and the united steel workers and came out against fast-tracked legislation, giving president obama authority to expedite
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negotiations on the trans-pacific partnership deal. unless the proponents of t.p.p. are willing to admit that surrendering manufacturing overseas is the price we are paying for an abstract idea. they are being disingenuous. scott joins me now. good to see you again. thank you for joining us. >> great to be with you. >> you are highly skeptical of the t perform p -- t perform perform because it's moteled too. much on agreements like nafta. the combined economic out put of canada mexico and the united states is $23 trillion thanks to the elimination of trade barriers. i wonder if you are fighting the globalisation. >> it's a good question. it's important to separate globalisation from the rules of
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trade. you hit on an important point. i don't. i don't think most of the tritics went to stop trade and realised globalisation is inevitable. the question for me and other skeptics is what are the rules who will benefit. when you look at the income of workers and the state of the manufacturing sector, and the united states trade performance and tef sits that signals there's a problem to address, that nafta didn't get to and the pp has not got to. >> something you talk subsection the policy around currency manipulation where they lower the value of currency. you say this is not addressed in the counter round of negotiations about t perform p. >> that's right, it's not addressed at all. and the challenge is that japan
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and malaysia have a history of currency manipulation. it's a mercantilist pr if you use the economic terminology. it undercuts the exports to the market making it artificially cheap. the net result is factory closures lost jobs. the obama administration had an county to deal with it. a lot weighed in. it's not just labour but businesses like the autocompanies, still companies. so far they ignored the concerns. they may have a price to pay. the majority of senators, a majority of members of congress support currency provisions in the t perform perform and trade agenda. it may come down to a floor
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fight and the administration and allies may stand to lose on it. >> getting into politics for a second you are there with the backdrop of the capital, you don't want a fast-track, but you don't thing that the deal is good. >> yes i think that's right. primary fast-track authority is looking to complete the trans-pacific partnership, signalling that it is ready to go affecting other agreements. i'm not opposed to the idea of an authority for the administration to complete trade deals. the rules are the things we have to look at. i don't think the grant of fast-track or the t perform p as -- t.p.p. as negotiated will be a good deal for factory workers. domestic manufacturers or the productive sector of the
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economy. you are the president of the manufacturing group. this is more than manufacturing. but agriculture and other. where the u.s. has trade surpluses that it can capitalize on. potentially that is true. again, one un - undoubtedly one outcome of this is increased incomes for corporations higher profits, more flexibility in terms of where to find the supply chains it may bolster the pros possibilities for some sectors. when you look at the tradeable sector manufacturing accounts for 60% of exports, and provides a lot of innovation 90% of patterns and we know when a factory closes down.
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we have competitive, innovative manufacturers. all we want is a level playing field. and i think we get the tp right. it might be worth knowing, and the challenges are our negotiators haven't listened to us or the majority of congress who weighed in on it. >> thank you for being on the show. scott paul is the president of the alliance. china is challenging america's economic clout from asia to under america's nose. >> there's a little bit of competition. next door in nicaragua, a chinese businessman plans to put $50 billion into a canal of his own.
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china's rising economic
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power is a reason president obama is anxious to pass a deal with other pacific rim country the tst pst p that we -- t.p.p. that we have been talking about. china's influence extends beyond asia to other areas, including latin america. one way china is making its presence felt is by making money. china loaned $56 billion to venezuela, $22 billion to brazil. $19 billion to argentina. the money has gone to infrastructure including high-speed trains ships, pipelines. all the money china is pumping into the region, adding up to a big change in a part of the world that america is used to dominating. david ariosto filed this report.
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>> reporter: china has been pulling the chains. beijing issuing 119 billion in loans to latin american countries, making china a dominant player in a cash-strapped region dominated by u.s. policy. >> china came out of nowhere to put a footprint in what america referred to as its backyard. >> that financing and the influence it yields is expected to get bigger as china looks to the raw materials it needs to support its economy. last year chinese banks increase investments in the countries by 71%. beijing pledged three-quarters of a trillion investment and trade, in exchange for contracts with firms. >> in 2010 chinese loans totalled more than those from the world bank the
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inter-american bank and the u.s. export-import bank combined. >> it couldn't have come at a better time or better way. latin america has a 6.2% annual g.d.p. gap. the majority of finance goes into infrastructure and energy. it used to be the domain of the united states. the panama canal is an knamp. america took over. there's competition in nicaragua. a chinese businessman plans to pour billions into a canal of his own, to challenge the panama canal. the impacts carry risks. given that major chinese energy is bound by less regulations and standards than the u.s. counterparts. the resulting deforest sayings and heavy use of chemicals
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jeopardise workers and communities. and that could give latin leaders pause, offering them a chance to redefine the relationship. >> david ari otto joins me now. globally we are short of 15 or 25 million. there's enough to go around. can china and the u.s. not be involved in the projects without getting in each other's way. >> it's a good question. when you look china was not a player. now you look at south america and brazil. peru venezuelan. you have china gradually moving into the region and like you mentioned before, one of the things that plays into all of this making it attractive for the investments is the lack of strings. when you look at what the i.m.f.
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is doing, china doesn't play that pay. you get a lot of financing and the rules and regulation. a week and a half ago, everyone realised there are strings. it may not sound like the established world bank but china has not given up. the copper petroleum, they need the raw materials to play into the economy. there are strikes attached. it's tied into what projects are visible for them, and there's protests. oftentimes you'll see that a chinese development company will be moving in. establishing projects that may go against the local environment. it makes them more expensive
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david ariosto. next the united states asks allies not to join the development bank. few are listening. is it the most common sign that the economies are in decline? answers in 2 minutes. 2 .
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despite u.s. potential, china is boldly rewriting the rules of global finance by creating a development bank to rival the international monetary fund and the west bank. it is called the asian
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infrastructure investment bank. the aiib you may hear it referred to as. china says 57 nations may be founding members. countries are signing up in the face of american opposition. including u.s. allies. china's goal is to raise $100 billion and provide financial support to infrastructure projects in asia. all has come as they refuse to give china a bigger say. the former treasury secretary says that failure paved the way to the u.s. economic influence. the loss of america's role as the underwriter, global economic system. it has plenty to do with the imf, an institution that is 71 years old. mary snow has a look at how it came about. >> reporter: you need to go back
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to world war ii as to how the international monetary fund came about. after war, there was a call to create an international monetary system before the war ends. the u.s. and britain led the way. it showed the delegates, it was here that the imt designed starting 2 years after the meeting. they needed a stable system. based on the link between the u.s. dollar and the price of gold. and that other countries can link it to the u.s. dollar to have a stable financial system. >> but the u.s. broke with that system in 1971, when president richard nixon made an announcement would no longer exchange dollars for cold through the official market. >> i am determined that the american dollar must never again be a hostage in the hands of
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international speculators. >> the u.s. felt others manipulated their currencies. chaos followed. authorities linked the actions. the i.m.f. seemed to lose his purpose. historians say he found one. the i.m.f. counts more than 100 countries as members. they pay quotas into one. the fund lends money to those in crisis. in the 1980s, latin american countries could not repay and turned to the melbourne cupped -- international monetary fund. in 1997 a financial crisis swept asia, and they were turned to. some said the fund made controversy worse. there was dissent among i.m.f. members about whether the i.m.f.
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should rescue it. >> many thought why is the fund going to the assistance of prosperous european countries when there are countries that are worse off, not having the same kind of access. in the end it gave loans. mary snow al jazeera it's too early to tell. it will turn into the i.m.f. it is clear that the bank gives shina an opportunity to expand influence in the region. with so many allies signing up. the u.s. may risk losing more clout by standing in opposition to the bank. a senior aing associate from the fletcher school joins us from boston. good to have you here. thank you for joining us.
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you are echoing a bit of larry summers concerns. this is serious. this is a wake-up call to washington. >> absolutely i believe it's the wake-up call to washington. they had, for a while, had a strategy called the asia pivot. i'm worried that it has turned into an asia peeve, where the united states is alone in shouldn'ting the new development, and everything are everyone else joined it. we are looking on from the side lines. >> we have such a shortage in the funding of infrastructure. we have great need in america, repairing the existing infrastructure. air traffic system. it's basic development. hydroelectricity, power generation. why is there not room for another investment bank? >> well there is certainly room
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for another investment bank. that is not the question of the the question is does the united states want to participate in the new development that is happening overseas. the united states needs to invest in its own infrastructure, but that should not be at the expense of us looking away at the huge developmental and infrastructure needs that are going to crop up and is already cropping up in the most dynamic parts of the world. >> you are not opposed to this infrastructure investment bank you are saying the u.s. should be involved. >> absolutely, absolutely. this was an investment bank focused on the developmental needs of the fastest growing region in the world, part of the world na in 2030 will have three of the four largest economies. by 2050 will generate half the world's global out put. if the united states is not a participant in the underlying
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infrastructure investment in that part of the world, we are likely to get left out of a lot of economic benefits that will come from this. >> you heard david talking about what the chinese are doing in nicaragua, and there's discussion in the countries about the fact that money coming from china comes with fewer conditions than the money coming if the west bank or the i.m.f. there's never free money, no free lunch as we like to say. >> absolutely. the people that take the money realise that the chinese money is not without its own baggage. so there is a lot of concern about china's longer term activists, and its short-term objectives. short term china needs markets, sources for resources and raw materials and is eager to secure those short-term relationships and is possible that many of
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these countries are concerned that over the long term china may not be sufficiently committed to the region. the other concern is it's not a transparent administration, and many of these countries are legitimately wary of that. and ultimately in addition to china lending and investing in many regions, in the asian region many of china's people are worried about the territorial regions in the south and east china sea. they are worried that china's stewardship of an investment bank could give it undue leverage on economies, political systems and hope the united states would be a power that count balances the leverage. ugg allies signed on. the u.s. is a hold out.
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so is japan. this is interesting. with japan as a member in the asian infrastructure investment bank if they join, u.s. allines have 41" of the votes. is it not words the u.s. encouraging japan to join so at that point the u.s. allies have more votes than china. >> the u.s. would be better off encouraging japan to join chest it looks a little silly, and encouraging japan to join telling allies not to join. yap japan is a steward of the development bank of the most threatened. >> thank you for being with us a senior associate dean at
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international business and offense at the fletcher school. that is our show. i'm ali velshi thank you for joining us. stepping down... >> quite honestly i have serious questions as to your confidence. the head of d.e.a. resigns amid an investigation into agents prostitution and sex parties a new phase. >> the saudis realise they have done everything they can saudi arabia end air strikes on yemen, the prospect of peace is distance much